Individual Assignment

Topic: Demonstration of the ethical view of a company

according to stakeholder theory.

Course Code: PHI 401

Section: 09

Prepared By -
Tanzir Islam Pollock
ID: 1721500030

Submitted To -

Barrister Afroz Imtiaz (Bai)

Lecturer,
Department of History & Philosophy
North South University
Date of submission: May 01, 2021

|P a ge
 LETTER OF SUBMISSION
May 01, 2021

To,

Barrister Afroz Imtiaz

Lecturer,
Department of History and Philosophy
School of Business and Economics
North South University
Bashundhara R/A, Dhaka.

Subject: Submission of PHI401 individual report.

Dear Sir,

It gives me an immense pleasure to inform you that I have successfully completed the
individual assignment on the topic: “Demonstrate the ethical view of a company according to
stakeholder theory” as per the requirement of the course PHI401. This assignment was very
insightful for me as I have explored and learned the aspects of stakeholder theories, business
ethics, and concepts of corporate accountability from a real life perspective. I firmly believe
the takeaways from this particular course will help me to understand and view corporate
governance in a much broader way in corporate life experience.

I sincerely hope that this report will be able to reach your expectations with what it has to offer
in terms of quality and content. If you have any queries, please do not pause to call me for any
sort of clarification. I look forward to your kind acceptance of this report.

Sincerely,

Tanzir Islam Pollock

ID: 1721500030

|P a ge
 TABLE OF CONTENTS
Introduction....................................................................................................................................................................1
Stakeholder theories.......................................................................................................................................................2
Importance of Stakeholders.......................................................................................................................................2
Stakeholder Theory and Types...............................................................................................................................3
Ethics and Ethical Theories.............................................................................................................................................4
Discourse Ethics......................................................................................................................................................4
Postmodern ethics..................................................................................................................................................4
Virtue Ethics............................................................................................................................................................5
Feminist ethics........................................................................................................................................................5
Utilitarianism...............................................................................................................................................................5
Justice system and fair treatment..............................................................................................................................6
Ethical Order...................................................................................................................................................................7
Employee rights and duties in business ethics.......................................................................................................7
Consumer rights......................................................................................................................................................8
Corporate Governance...................................................................................................................................................9
Corporate Social Responsibility......................................................................................................................................9
Types of Corporate Social Responsibilities.................................................................................................................9
Importance of CSR....................................................................................................................................................10
Globalization.................................................................................................................................................................11
Sustainability.................................................................................................................................................................12
Environmental Sustainability influence on the Stakeholder theory.....................................................................12
Economic Sustainability influence on the Stakeholder theory.............................................................................12
Social Sustainability influence on the Stakeholder theory...................................................................................13
Towards sustainable employment............................................................................................................................13
Green jobs.............................................................................................................................................................13
Attempts to re-humanize the workplace –...............................................................................................................13
Application and Justification for a pre-imagined company..........................................................................................14
Conclusion.....................................................................................................................................................................15
References....................................................................................................................................................................16

|P a ge
 INTRODUCTION

Business ethics has enormous significance in each and every aspect of a company. In order to
ensure that the company functions smoothly, issues of right and wrong must be addressed within
the company. We know that ethical views possess an idea of what is right and wrong. However,
such views differ from company to company. Whether the ethical views of a company are
justified or not can be demonstrated through stakeholder theory. The concept of stakeholder
theory stresses the relationship between a business and its stakeholders. The project's goal is to
determine whether a company's ethical views are justified or not in the eyes of stakeholder
theory, as well as to provide relevant guidelines for a company to ensure the overall stability of
its ethical views. There is a possibility that stakeholder theory is going to be justified option for
any sort of companies.

1|P a g e
 STAKEHOLDER THEORIES

An organization's stakeholder is any entity or individual, social group, or organization

that can influence or is influenced by the achievement of the organization's goals. They are the
reason behind a company's existence since they have an interest in the company and are directly
or indirectly associated with it. Stakeholders in a company can be both internal and external.
Internal stakeholders have a direct line of communication with the company. On the other hand,
External stakeholders are not directly involved in the company, but they get affected by the
company's performance.

IMPORTANCE OF STAKEHOLDERS

A company's success is solely determined by its stakeholders. In every organization, each

and every stakeholder plays a role. The different types of stakeholder and their importance are
given below.

Internal stakeholders

• Owners: They are the leading investor of the Company. They assist in decision-making
process, provide funds for investment, assist in increasing sales, generate new business ideas,
direct a company's management system, and tries to reduce the risk while maximizing the profit.

• Manager: The efficiency and cooperation of the employee depend on managers. They are so
crucial that the organization will not grow without a good leader.

• Employees: These people are the main driving force of a company. The combination of their
performance is the reason for a company’s growth.

External Stakeholders

• Customers: They are the source of profit. They give all the essential info and a guide about how
to modify the product.

• Suppliers: The production entirely depends on the suppliers. If they supply quality raw
materials at standard prices and quick business will produce a quality product.

2|P a g e
• Competitors: By observing the competitors, an organization realizes how to serve a particular
market. They also help to find unique traits that are appealing to customers.

• Government: Government advocate organization about businesses' ethical issues and fix law
and rules for business, which is essential for the organization.

Since every stakeholder can have an effect on the business, a company should maintain good
relationships with all of its stakeholders and give them equal weight of priorities. According to
Stark, the stakeholder theory of the firm is probably the most popular and influential theory to
emerge from business ethics.

STAKEHOLDER THEORY AND TYPES

According to the ethical viewpoint of a company, the Stakeholders theory is justified

because it provides a tight constrained moral environment to a company where ethics and ethical
theories are followed. As a result, it prioritizes morality, equal rights, and responsibility in any
aspect of a company's operations while still making a profit. The business would then be able to
establish positive relationships with all of its stakeholders and clients, which would aid in its
long-term viability and sustainability. In today’s world customers are more aware about the
unethical practices done by businesses. So to survive in the long run it is essential for any
business to prioritize their stakeholders first.

Types of Stakeholder Theory -

i. Normative Stakeholder Theory

It involves the reasons why a company requires considering stakeholder interests.
ii. Descriptive Stakeholder Theory
It tries to figure out how companies consider stakeholder interests.
iii. Instrumental Stakeholder Theory
It deals with whether it is justified to consider stakeholder interests.

3|P a g e
 ETHICS AND ETHICAL THEORIES
Defining morality, ethics and ethical theory –

The norms, values, and beliefs embodied in social processes that determine right and
wrong for a person or a group are referred to as morality. Business leaders are driven by their
morality to be fair and just towards the stakeholders. They recognize moral issues first, make a
moral judgment, establish moral intent, and then engage in moral behavior. Corporate managers
prioritize specific stakeholders who have the organization's urgent needs or high urgency, great
importance, and better relationship with the organization.

The study of morality and the application of reason to elucidate specific rules and principles that
determine morally acceptable courses of action are the ethics.

Ethical theories are the codifications of these rules and principles.

DISCOURSE ETHICS

This aims to solve ethical conflicts by providing a process of norm generation. The
ultimate goal of ethical problems in business should be to resolve disputes in a peaceful manner.
This method is thus expected to generate norms by creating a logical "ideal discourse" about
specific problems. Discourse ethics is more of a recipe for practical conflict resolution than an
ethical theory. In simple terms, it assumes that ethical business should be rooted in stakeholder
dialogue based on equal participation and conducted without domination or coercion by any
party.

POSTMODERN ETHICS

An approach that situates morality outside of the realm of reason in an emotional ‘moral
impulse' toward others. Individual actors are encouraged to challenge daily behaviours and laws,
as well as to listen to and obey their impulses, inner beliefs, and "gut feelings" on what they
believe is right and wrong in a given decision-making situation.

4|P a g e
Postmodern business ethics emphasises in -

o Holistic approach

o Examples rather than principles

o ‘Think local, act local’

o Preliminary character

VIRTUE ETHICS

Approaches to business ethics based on character and integrity have primarily drawn on
one of the earliest ethical theories that is, the virtue ethics. The core message of virtue ethics is
that ‘good deeds come from good people,' where good people are characterized by certain
attributes or characteristics, referred to as ‘virtues.' Intellectual virtues, such as intelligence, are
distinguished from moral virtues, which have a long list of potential qualities such as integrity,
bravery, friendship, mercy, fidelity, humility, patience, and so on.

FEMINIST ETHICS

Feminist ethics, on the other hand, takes a different approach, emphasizing the
importance of the individual's place in a web of interpersonal relationships. As a result of this
approach, which is also referred to as an ethics of treatment, major variations in perspectives on
ethical problems emerge. Relationships, responsibility, and experience are all important aspects
of feminist ethics.

UTILITARIANISM

According to utilitarianism, the most ethical choice is the one that will result in the
greatest good for the greatest number of people. On the contrary, egoism holds that the morality
of an action is determined by its effect on oneself. The most ethical behavior is what solely
benefits us. Utilitarianism considers the welfare of stakeholders, whereas egoism ignores the
interests of others. Some organizations distributed thousands of free masks, precautionary signs,

5|P a g e
placards, and festoons to poor people and children to help contain the spread of coronavirus. It is
an example of utilitarianism.

JUSTICE SYSTEM AND FAIR TREATMENT

Justice is described as the simultaneous fair treatment of all persons in a given situation,
resulting in everyone receiving what they deserve. The moral issues here are what "fairness"
means in a given situation and how we can decide what a person is entitled to based on a few
criteria. In most justice theories, fairness is presented in two ways:

- Fair Procedures (procedural justice

- Fair outcomes (distributive justice) 

Employees are a company's most valuable asset. Fair treatment is a policy that guarantees that all
workers of a company are treated equally and fairly. Employee engagement and work
satisfaction are both affected by employee expectations of fairness. Employees who are treated
fairly are less likely to file a lawsuit. Humans are now widely regarded as the most valuable and
valuable resource. Around the same time, the human resource department ensures that workers
are getting the most out of them while still ensuring that they are doing so ethically. As a result,
fairness plays a critical role in the equal treatment of employees and their success.

6|P a g e
 ETHICAL ORDER

EMPLOYEE RIGHTS AND DUTIES IN BUSINESS ETHICS

Employees are recruited and managed by the HR department of a company. In the recent
time humans are considered to be the most costly and important resources. And also human
resource department makes sure to get the maximum output from the employees. And they also
have to make sure that they are doing these in an ethical way.

The employees are one of the main stakeholders of the company. The rights of the employee as a
stakeholder in a company are given below:

 Right to freedom from discrimination -

Discrimination occurs when certain workers are given additional benefits or opportunities while
doing nothing extra or possessing additional qualifications. All should be regarded fairly,
regardless of their qualifications, and given the same opportunities.

 Right to Privacy -

In an organization, an employee must have a right to privacy. Nowadays, an employer can

monitor almost all an employee does by monitoring emails, the internet, and social media. This is
wrong because he can only keep an eye on items that are related to the business.

 Right to due Process -

An employee has the right to know why he is getting fired or getting the full due payment while
leaving the company. Also he has the right to get promotions if he is eligible for it.

 Right to healthy and safe working condition -

Everyone has the right to work in a healthy and safe working place.

 Right to fair wages -

It is also a right of the employees to get fair wages according to industry standard.

7|P a g e
  Right to freedom of conscience and speech -

Everyone has the right to speak whatever they want but it is also the duty of the employee to not
give away information which could be harmful for the company. It is considered as whistle
blowing.

An employee also has some duties towards the company as well. The duties of the employees as
the stakeholder of the company are given below:

 Duty to comply with labor contract -

Employees must be loyal towards their works and maintain an acceptable level of performance.

 Duty to comply with the law -

Employees mustn’t do anything unlawful such as bribery.

 Duty to Respect employers property -

Employers mustn’t waste any resources of the company or waste any working hours.

CONSUMER RIGHTS

Great business morals ought to put the client as one of the vital partners and allow the
customer his or her due share. Customer as partner speaks to that the customer is the “lifeblood”
of any organization. Peters and Walterman’s consider that “excellent companies” have incredible
well-known name within the community ("ClientPartners", 2020).

Some of the main rights of consumers are:

• Rights to safe products

• Honest and truthful communications

• Fair prices

• Fair treatment

• Privacy

8|P a g e
 CORPORATE GOVERNANCE
The set of rules, practices, and processes that guide and control a company is known as
corporate governance. It is the process by which shareholders ensure that their business is
running according to their wishes. Shareholders, directors, consumers, vendors, financiers, the
government, and the general public are all stakeholders in corporate governance. It includes
processes for goal-setting, tracking, governing, and sanctioning. Since corporate governance also
serves as a structure for achieving a company's goals, it covers nearly every aspect of
management, from action plans to internal controls to performance measurement and corporate
disclosure. The principal-agent relation in corporate governance says that there are some rights
of shareholders on the other hand, there are some duties of managers. The right of shareholders
are to sell their stocks, have the right to vote in general board meetings, and the right to sue
managers for misconducts. On the other hand, managers duties includes that they should work
for the benefit of the company, duty of diligence and duty of care and skill.

CORPORATE SOCIAL RESPONSIBILITY

Social responsibilities refer to the responsiveness of business activities that have an effect
on society and in decision making consideration of the impact by firms. Business organizations
produce goods and services although it does have some effect on the society as well as the whole
public of Bangladesh. Social responsibility for a business organization is obligatory. In
Bangladesh increasingly comprehensive CSR programs are planned to engage each business unit
as a whole for sustainable development and to have dedicated management with impactful
resources.

TYPES OF CORPORATE SOCIAL RESPONSIBILITIES

Corporate social obligations are morals and measures that commerce makes to advantage society
are based on maintainability in four diverse categories:

o Economic Responsibility: An interconnected field focusing on balancing business,

environmental, and philanthropic practices. These procedures meet the normative
expectations of society and ensure that every employee is treated fairly.

9|P a g e
 o Environmental Responsibility: Emphasizes the efficient use of natural resources and the
prevention of contamination caused by the various processes involved in our industrial
operations. This encourages the environmentally friendly use of raw materials and natural
resources. This focuses on reducing toxic greenhouse gas emissions and mitigating
environmental pollution caused by humans.

o Ethical Responsibility: Focuses on their employees' well-being by ensuring fair labor

practices. These procedures meet the normative expectations of society and ensure that
every employee is treated fairly.

o Philanthropic Responsibility: Dedicated to serving humanity by assisting the poor and

needy. It is a responsibility that is taken on voluntarily. Companies that practice
philanthropic responsibility hope to leave a lasting impression on their customers. Here,
they try to demonstrate that they want to give back to their community.

IMPORTANCE OF CSR

Corporate Social Responsibility (CSR) is not a legal necessity, but it’s a good practice for
any company. It shows that a business cares more for social problems than profits. These
companies can also inspire and involve their employees in productive activities. For CSR
activities and to improve public perception, a company can use some of the following tools -

 Manufacturing plants may use an "Effluent Treatment Plant" (ETP), which purifies
industrial waste water and allows it to be reused.

 They can try to maintain biodiversity and plant trees.

 Companies can support the educational system. They can do by taking responsibilities of
a few bright student’s higher education.

 They can try to promote women empowerment across every sectors.

 Doing charitable work like sharing a certain percentile from their profit dedicated for the
unprivileged people in our society.

 Try to arrange some campaign for example medical campaign, tree plantation, road
safety, equality, sexual harassment movement etc.

10 | P a g e
 GLOBALIZATION
Globalization is an essential factor of the business in the present time. It is also known as
deterritorialization which refers to the process where the need for a shared and common
territorial basis for social, economic, and political activities, processes, and relations are reduced.
Meaning, any company can do business anywhere and there will be no barriers. When a
company goes global, it creates lots of opportunities for that particular country's local people.
When a company globalizes at that particular time, the Company needs to consider three things:
Cultural issues, Legal issues, and Accountability issues.

Corporations tend to be more active in overseas markets when they become less territorially
fixed. However they do face unexpected conflicts and unethical demands from the host counties.
For example, if a Bangladeshi restaurant expands to the overseas, the stakeholders will face
unfamiliar situations because of different culture clash. This is where culture issue exists. An
organization must also deal with legal and accountability issues in addition to the cultural
problem. When a corporation sets up shop in a foreign country, it must adhere to the legal
requirements of that country. Employees cannot be fired without prior warning. An organization
is also responsible to its stakeholders, such as whether or not it invests in productive sectors.
Stakeholders may experience both positive and negative effects as a result of globalization.
While many possibilities arise as a result of globalization, it also creates some negative
consequences.

11 | P a g e
 SUSTAINABILITY
Sustainable development involves doing business in such a way that it meets the current
needs without having to compromise the ability of future generation needs. To do so one has to
be responsible towards the environment, economy and society. These three together (economic
stability, environment and social welfare) are the three dimension of sustainability and called the
triple bottom-line.

ENVIRONMENTAL SUSTAINABILITY INFLUENCE ON THE STAKEHOLDER THEORY

The basic principles of sustainability in the environmental context relate to the efficient
management of physical resources in order to ensure their conservation for the future. Because
all biosystems have finite resources and finite capacity, sustainable human activity must operate
at a level that does not jeopardize the health of those systems. Current people and future
generations are thus affected by corporate decisions and thus influenced by sustainability. The
companies should take care of nature and the environment and think about the future
generations. For example: Some car companies think about the pollution thus creating hybrid or
electric cars, Also the garments or dying industries pollute water so they can install an ETP to
produce clean water instead of polluted water. The companies should not waste the materials
rather they should only use as needed. 80% of the waste materials are organic wastes, which
includes food. So, restaurants should be responsible enough so that not much food is wasted.

ECONOMIC SUSTAINABILITY INFLUENCE ON THE STAKEHOLDER THEORY

Initially emerged from economic growth models, economic perspectives on sustainability

assess the limits imposed by the carrying capacity of the earth. A part of economic sustainability
focuses on the companies’ economic performance: developing, producing, and marketing those
products that secure the long-term economic performance of the corporation are the
responsibilities of the management. This focuses on the example that leads to a long-term rise in
share price, revenues, and market share rather than short-term ‘boom’ of profits at the expense of
long-term viability. For example: the corporations must abstain from taking bribes, deceiving the
consumers, rather they should provide products or services which add value for money.

12 | P a g e
SOCIAL SUSTAINABILITY INFLUENCE ON THE STAKEHOLDER THEORY

Social factor of sustainability is a challenging area of development. If Social

sustainability is stated in one sentence it means “Caring for the people''. 80% of the world's GDP
is enjoyed by only 1 billion people and the rest 6 billion of the world who live in developing
countries enjoys the remaining 20%. The key issue here is Social Justice which firstly applies to
the global level. In Bangladesh the maximum number of the people are poor and a very few are
very rich. Some cannot afford meals for a day and some have 3-5 cars of very renowned brands
worldwide. Such inequalities are unsustainable and are a threat to not only the balance of the
economy but also to the social and political institutions in the country.

TOWARDS SUSTAINABLE EMPLOYMENT

Sustainable employment is the ability of the employee to provide added value for an
organization now and in the future, while also experiencing added value themselves. Here are a
few ways in which we can do it -

GREEN JOBS

Green jobs are decent jobs that contribute to preserve or restore the environment, be they in
traditional sectors such as manufacturing and construction, or in new, emerging green sectors
such as renewable energy and energy efficiency.

Green jobs help:

 Improve energy and raw materials efficiency

 Limit greenhouse gas emissions

 Minimize waste and pollution

 Protect and restore ecosystems

ATTEMPTS TO RE-HUMANIZE THE WORKPLACE –

Job enlargement: The term "work enlargement" refers to the addition of new tasks to an
established task at the same stage. This ensures that a person's current work can include more
and different tasks. For example, an employee who can now handle their own planning instead of
relying on the manager to do so. The aim is to inspire an employee by increasing his or her

13 | P a g e
efforts and visibility in order to achieve the organization's goals. This allows an employee to
achieve a broader range of goals without having to do the same thing over and over again.

Job enrichment: Job enrichment is a process that involves adding dimensions to existing jobs in
order to make them more motivating. Job enrichment broadens an employee's task set and the
skills that he or she can develop. This results in more stimulating and interesting work, as well as
more variety, challenge, and depth to their daily routine. Jobs with higher levels of autonomy,
independence, and responsibility provide more freedom, independence, and responsibility.

APPLICATION AND JUSTIFICATION FOR A PRE-IMAGINED COMPANY

Word count till this point = 3458

14 | P a g e
CONCLUSION

15 | P a g e
 REFERENCES

ANALYSING INSTRUMENTAL STAKEHOLDER THEORY PHILOSOPHY ESSAY. (2015). UKEssays.com.

https://www.ukessays.com/essays/philosophy/analysing-instrumental-stakeholder-theory-
philosophy-essay.php
Christiansen, B. (2013). ECONOMIC BEHAVIOR, GAME THEORY, AND TECHNOLOGY IN EMERGING
MARKETS. IGI Global.
Corporate Finance Institute. (2020, May 25). STAKEHOLDER VS SHAREHOLDER - IMPORTANT
DIFFERENCES TO KNOW.
https://corporatefinanceinstitute.com/resources/knowledge/finance/stakeholder-vs-
shareholder/
Crane, A., & Matten, D. (2016). BUSINESS ETHICS: MANAGING CORPORATE CITIZENSHIP AND
SUSTAINABILITY IN THE AGE OF GLOBALIZATION. Oxford University Press.
ETHICAL DECISION MAKING BY INDIVIDUALS IN ORGANIZATIONS: AN ISSUE-CONTINGENT MODEL |
ACADEMY OF MANAGEMENT REVIEW. (1991, April 1). Academy of Management.
https://journals.aom.org/doi/10.5465/amr.1991.4278958
JOB ENRICHMENT: A FULL GUIDE (INCLUDING 12 EXAMPLES). (2020, February 26). AIHR Digital.
https://www.digitalhrtech.com/job-enrichment/
JOB ENRICHMENT: ENHANCING JOBS FOR GREATER MOTIVATION. (n.d.). Management Training and
Leadership Training - Online. https://www.mindtools.com/pages/article/newTMM_81.htm
Tzanakakis, K. (n.d.). MANAGING RISKS IN THE RAILWAY SYSTEM: A PRACTICE-ORIENTED GUIDE.
Springer Nature.
UTILITARIANISM DEFINED. (n.d.). Investopedia.
https://www.investopedia.com/terms/u/utilitarianism.asp
WHAT IS A GREEN JOB ? (2016, April 13). https://www.ilo.org/global/topics/green-
jobs/news/WCMS_220248/lang--en/index.htm

16 | P a g e